1. Double entry accounting means that:

a. Every transaction requires a debit and a credit entry, or two debit entries, or two credit entries are required.

b. For every transaction there must be at least one debit entry and at least one credit entry.

c. Only that two individual accounts must be involved in recording any transaction.

d. Every transaction should effect an asset and a liability.

2. Fill in the Blanks

a.) The normal balance for an ASSET account is a ______ balance and it increases with a (debit or credit) _____ entry.

b.) The normal balance for a LIABILITY account is a ______ balance and it decreases with a (debit or credit) _____ entry.

c.) The normal balance for a SHAREHOLDERS' EQUITY account is a _______ balance and it increases with a (debit or credit) ________ entry.

3. If a company borrows to purchase a building:

a. No economic event has occurred so no further action is required.

b. Assets and liabilities are effected.

c. Only assets are effected.

d. Only liabilities are effect.

4. Transaction analysis practice

a.) If a company provides services to a customer on account what account would be debited and what account would be credited?

5. Which of the following is NOT true regarding journalizing transactions:

a. Transactions are recorded in chronological order.

b. Credit entries are always indented.

c. There can be many different accounts effected.

d. The credit entry is always recorded first.

6. The Chart of Accounts is:

a. An external report showing the assets, liabilities and shareholders' equity of a company.

b. A flow chart showing the flow of costs in a company's accounting system.

c. A listing of all individual accounts with account titles and dollar balances.

d. A listing of all of the individual accounts to be used to record transactions.

7. The general ledger is:

a. An informal analytical tool used to record the impact of transactions in individual accounts.

b. The place where economic events are originally recorded in a company's accounting sytem.

c. A formal 3 column format used to record individual account activity and balances.

d. A listing of a company's account names and reference numbers only.

8. General journal entries are posted to the general ledger:

a. After every transaction.

b. At the end of each day.

c. Only when financial statements are to be prepared.

d. Only after a certain maximum number of transactions have been recorded.

9. When posting from the general journal to an individual account:

a. Debit entries should be debited to the individual account.

b. Debit entries should be credited to the individual account.

c. Debit entries can be debited or credited to the account, as long as the amount is correctly transferred.

d. Only accounts with a normal debit balance should be debited.

10. The Trial Balance:

a. Proves that the recording of all accounting transactions are correct if total debits and credits are equal.

b. Assists in preparation of the financial statements, but plays no role in proving correctness of accounting information.

c. Shows the monthly detail and final balances of an individual account.

d. Proves with certainty that the accounting equation is still in balance.

11. Journal Entries & Trial Balance

Icey's Skating & Hockey Academy Corp.'s general ledger at March 31, 2020, showed Cash $23,000; Equipment $2,000; Accounts Payable $500; Unearned Revenue (for advance registration fees) $17,500; Common Shares $1,000; and Retained Earnings $6,000. The following transactions occured during April:

• Apr. 2 - Paid for ice time for first two weeks of April, $5,000.
• Apr. 4 - Booked ice with the city for the April session. It will cost $10,000.
• Apr. 6 - Received and paid a bill for $500 for advertising of the April skaiting academy.
• Apr. 9 - Paid $300 of accounts payable outstanding at March 31.
• Apr. 13 - Paid coaches and assistant coaches, $1,000.
• Apr. 16 - Paid for ice time for remainder of April, $5,000.
• Apr. 18 - Received a bill for Internet service (a utility) for $100. This invoice is due on May 15.
• Apr. 19 - Pid $200 cash for supplies used immediatley.
• Apr. 24 Received advance registrants for the next four-week skating session in May, $2,200.
• Apr. 25 - Paid income tax instalment for the month, $880.
• Apr. 27 - Purchased gifts for volunteers who helped out during April session, $300. The business considers this an Advertising Expense.
• Apr. 30 - Paid coaches and assistant coaches, $1,000.
• Apr. 30 - Last day of April session. All of the advance registration fees have now been earned.

Instructions

a) Journalize the April transactions. Make a table.

b) Set up T-accounts, enter the beginning balances in the general ledger at March 31, and post the April journal entries to the general ledger.

c) Prepare a trial balance at April 30.